What the Future Holds
It would be nice to be able to see into the future and know what it holds. If we knew now what our future financial needs would be, it would be easy to make decisions about saving, giving, and even the distribution of our estates when our earthly needs are done.
But we do not know, and we must plan as best we can. Consider these three options:
Option One: Complete Availability of Assets
Let us assume that we keep all assets available to meet emergency needs—certificates of deposit, mutual funds, and other investment that can be easily liquidated to pay expenses.
On the surface, this makes sense. But what happens if medical expenses or nursing home care use up all of the assets, and life continues?
Option Two: Complete Unavailability of Funds
The other extreme is to set aside all of our funds so that they cannot be used for emergency expenses. Irrevocable trusts, annuities, and life estate agreements may protect funds.
This may also seem like a good idea. But what if we change our minds? Some agreements do not allow a change in use or beneficiary designations.
Option Three: Combination of Availability
Good financial planning would probably say that a combination of the first two options is best. We should keep a percentage of our assets available and set aside a percentage in order to guarantee income for life—regardless of the cost of medical bills or nursing home care.
The fact is we are always going to need some income.
What percentage should be set aside to guarantee income? If you have a financial adviser, she or he can help you decide how much should be guaranteed and the form of that guarantee. It is important that you be comfortable with your plan.
Charitable Gifts and Lifetime Income
In many situations, your charitable giving can be combined with your desire to secure lifetime income. Charitable income agreements often provide tax advantages at the time the agreement is created, tax-free income, and avoidance of capital gains tax. The agreement can also provide income for a surviving spouse.
Regardless of what happens to your finances during life, the gift that you intended for your charitable organization has been guaranteed.
How We Can Help
A Charitable Income Agreement can increase your cash flow in retirement years, provide a charitable deduction to offset other income taxes you may be paying, and guarantee the gift you wish to make to ministry at your death. We have prepared an ebook, A Guide to Charitable Income Agreements. Download your free copy today.
